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Read any technology trends piece and you’d be forgiven for
thinking that all roads lead to the cloud. Be it email, gaming, word processing
or photo storage, it seems that we’re rapidly moving to an economy based on
services, not commodities. Television seems the next logical step and although the
market is still relatively immature, the path is already littered with numerous
stories of success and failure.

With modern viewers beginning to drift away from the traditional
TV format and look for new ways to consume content, most providers have started
to look outside the current set-up. Sky Go, 4OD and BBC iPlayer represent a
cautious move into a TV Everywhere approach (often referred to as ‘video
on-demand’), a new model in which providers offer customers access to their
content through a number of devices via the internet.

However, it is the growth of over-the-top content providers such
as Netflix, Hulu and NowTV, that is causing the greatest stir. The continued rise
of this technology has helped to redefine what it means to ‘watch TV’; the
Netflix service, for example, now reaches over 50 million members
across nearly 50 countries. It is not such a happy story for others
players in the market: the US Supreme Court’s decision to rule Aereo’s internet
TV service as illegal back in June 2014 has had serious implications
for the industry – not only placing limits on the use of technology, but also
on the viewer’s freedom to consume programming in a manner which suits their
lifestyle.

Clearly the move towards Cloud TV is not as straight-forward as
many seem to suggest. There are a number of different factors which work to
create a significant challenge for any prospective providers.

Challenge One: Over-Hyping the Influence of the Cloud

Cloud is just a technology, not a silver
bullet – building
your service on the cloud will no more lead to innovation than investing in pen
and paper will lead to the creation of a best-selling novel.

As a foundation for your organization’s infrastructure, the
flexibility and low CapEx implications of cloud computing can enable business
to take advantage of new working models which were simply unavailable in
previous years. In fact we recently conducted research which showed that 64% of
businesses were enjoying increased agility thanks to the cloud, with 53% experiencing cost reductions[1].
However, it’s important to understand that using cloud is not in itself
innovative – real innovation comes from using the model in different, unique
ways. Netflix is a great example of this: the company has used the cloud to
give it a fast and low risk ability to scale the business on demand. The
flexibility of its infrastructure has allowed Netflix to continue improving its
platform and shorten the time to market for new ideas – all without the cost
associated with buying their own broadcast hardware.

Challenge Two: Frustration Thanks to Legislation

Distribution rights represent the key to winning the Cloud TV market
– and while technology has moved on dramatically since the 1970s, the law’s
stance on TV copyright has not.

Part of the benefit of a cloud model is the ability to reach
across any number of regions with very little difficultly. But while
prospective Cloud TV providers may have the capability to reach audiences
across the globe, they may not have the rights! Each market has their own
content rights and breaking these restrictions can lead to real difficulties –
Aereo being a prime example.

So what’s the best solution? Realistically, any Cloud TV offering
will need to employ high levels of automation and authentication in order to
streamline the process and ensure the right content reaches the right audience.
The automation must be highly reliable or providers could find themselves
slapped with serious lawsuits based on geographical rights.

Challenge Three: Keeping Consumers Fed, No Matter What

The traditional model of TV distribution has been built and
adapted over a number of decades. We've moved from the sometimes intermittent
experience of the test card to the continuous 24/7 and largely uninterrupted
world we take for granted. The challenge for any Cloud TV business is to be
able to replicate this ‘always-on’ all-time experience.

This means being prepared for spikes and troughs in infrastructure
demand – not only caused by the viewing habits of your current audience, but
also being able to react to an influx of new subscribers as your content
evolves. The cloud could help TV providers keep up with the demand. Our research also highlighted that the cloud,
when used correctly, has helped 44% of UK businesses keep up with the
demands of their customers and the market. So when it comes to making sure your
IT estate can keep up with the latest technology developments – 4K Ultra HD TV
perhaps – cloud computing might just be the difference.

Ultimately, it doesn’t matter what content you can provide, if you
can’t maintain the exceptionally high levels of availability the modern audience
is accustomed to then they will simply default to the usual TV model.

Challenge Four: Delivering, Whenever and Wherever

As we’ve discussed, consumers now demand near constant access to
TV. It doesn’t matter what device or network is being used, if they can’t
access the service they will vote with their feet. Providers will need to work
closely with organizations all along the chain – from media companies and
device manufacturers to network, data centre and content delivery providers – in
order to offer a high quality and seamless experience which is not only
available, but also reliable and flexible to the demands of the market.

Interviews were carried out in February 2015 by Vanson Bourne on behalf
of Sungard Availability Services. 400 interviews were conducted altogether: 150
from the UK, 150 from France and 50 each from Sweden and Ireland. The research
spoke to IT decision makers in businesses of over 500 employees in the UK,
France and Sweden and 250 in Ireland across a variety of sectors – including 66
decision makers from financial services organisations.

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